Trump’s use of dodgy accounting on Chicago tower means he could be $100m in red, IRS probe reveals

The former president’s tax records have been under scrutiny since the 2016 election

Andrea Cavallier
Saturday 11 May 2024 17:33
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Former president Donald Trump could end up owing more than $100 million to the Internal Revenue Service after he used a dodgy accounting tactic to claim improper tax breaks on his Chicago building, according to a The New York Times and ProPublica investigation.

Trump International Hotel & Tower in Chicago, according to The New York Times and ProPublica.

The IRS believes Mr Trump violated a law meant to prevent double-dipping on tax-reducing losses, and that he essentially wrote off the same losses twice, the probe revealed.

The building, the Trump International Hotel & Tower in Chicago, which was completed in 2009, has been considered to be a massive money pit over the years.

By writing off his losses twice, Mr Trump was able to double dip on the tax benefits gained from the tower’s financial losses, the report claims.

Former president Trump’s tax records have been under scrutiny since the 2016 presidential election (EPA)

On his 2008 tax return, Mr Trump claimed that the investment in the 92-story skyscraper met the tax code definition of “worthless,” because his debt on the project meant that he would never see a profit.

According to The Times and ProPublica, this resulted in Mr Trump reporting losses as high as $651m for the year. The probe found there was no indication that the IRS challenged Mr Trump’s claim.

Mr Trump’s tax records have been under scrutiny since the 2016 presidential campaign when refused to release his returns.

In 2010, Mr Trump shifted the company that owned the tower into a new partnership in an effort to further gain benefits from the Chicago project, the report says.mThis move was then used as justification to declare $168m in additional losses over the next decade.

“Because he controlled both companies, it was like moving coins from one pocket to another,” according to The Times.

The Trump International Hotel and Tower in Chicago, which was completed in 2009, has been considered to be a massive money loser over the years (AP)

A years-long investigation by the IRS into the matter is still ongoing, The Times reported.

As part of their probe, The Times and ProPublica consulted with tax experts, who calculated that a revision by the IRS would result in a new tax bill of more than $100m, plus interest and potential penalties.

The Independent has contacted the Trump Organization for comment.

Mr Trump’s son Eric Trump, executive vice president of the Trump Organization, issued a statement to The Times.

“This matter was settled years ago, only to be brought back to life once my father ran for office. We are confident in our position, which is supported by opinion letters from various tax experts, including the former general counsel of the IRS,” he said,

An IRS spokesman told The Times that the federal law prohibited the agency from discussing private taxpayer information.

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